Bill to ship to in case of works contact material transfer

hi! we recently got a works contract out of state. it is suggested that we transfer material in a bill to ship to model as we don't have any place of business in the state where we are working. But our apprehension is this, in case we use bill to ship model and generate e way bill does not it transfer the title in goods to our client? if yes then is it proper? as we are not selling the materials to customer we are merely using it to construct a structure we intend to sell the customer. If we want to retain ownership of the raw materials, will it be proper to use bill to ship to model?? even if we use delivery challan we have to use bill to ship to transfer to generate e way bill. we are utterly confused please help.

Hey K Chakraborty! This is a common point of confusion in works contract material transfers under GST. Let me break it down for you:

Bill To – Ship To Model & Title Transfer

Bill To – Ship To basically means the invoice is raised to one party (Bill To), but goods are delivered to another location (Ship To).
In your case, you don’t have a business place in the out-of-state location, so using this model to generate E-way bills for transferring materials to the worksite is common.
Title transfer?
The Bill To – Ship To model does NOT automatically mean ownership/title of goods transfers to the client. It just reflects the place where the goods are shipped. Title depends on the terms of your contract, not the billing model.

Ownership Retention

Since the goods are used in the works contract (not sold as goods), you retain ownership until you complete the contract and invoice the client.
You can use Delivery Challan for movement of goods for works contract as per GST rules when no sale is involved at the time of movement.
Even if you use Bill To – Ship To on the invoice, your contract terms decide ownership, not the invoice or E-way bill per se.

E-Way Bill Generation

For E-way bills, if the goods are moving from your state to the contract location where you don’t have a registered place, using Bill To – Ship To on invoice + generating E-way bill is standard practice.
Alternatively, you can generate E-way bill on the Delivery Challan number if goods move without invoice, but Bill To – Ship To with invoice is easier for GST compliance.

What you should do:

Maintain clear contract terms stating ownership of goods is with you until final supply or project completion.
Use Bill To – Ship To for invoicing and E-way bill generation to avoid GST complications in different states.
Retain Delivery Challan for goods movement if no invoice is raised at the time.
Document all transactions clearly to avoid disputes.

Summary:
Using Bill To – Ship To model for E-way bill generation does NOT automatically mean ownership is transferred to your client. Ownership depends on your contract, not the billing model.